Frenemies – Opportunities for Russian-Georgian Cooperation

Charles Johnson is a freelance writer and analyst based in Tbilisi, Georgia. His topics of interests include Russia, Eurasia, and Political Economy. He has an MA in International Relations and Economics from the Johns Hopkins School of Advanced International Studies (SAIS), and a BA in History and Political Science from Boise State University.

Georgia and Russia have a difficult bi-lateral relationship. The two have been at loggerheads for the majority of the Post-Soviet Era on matters such as territorial integrity, ethnic minority populations, and exactly how to define and operate within so called international spheres of influence. Presently, the relationship between the two countries is stagnant at best. Their diplomats do engage on a limited basis on commercial matters, the movement of people, and in the occasional round of the Geneva talks over Georgia’s two frozen conflicts. However, given the high potential for economic benefit, and increased (albeit not complete) political stability in the South Caucasus, it is in the interest of these powers to start to cooperate in certain areas, although nobody is expecting them to be best of friends. Essentially, Russia and Georgia need to learn how to be frenemies.

A quick Google search of frenemy returns the definition: “A person with whom ones is friendly despite a fundamental dislike or rivalry.” In this regard mutually beneficial interactions between the two states do not have to be predicated on the resolution of their greater points of consternation. This paper will be a tour of the economic and political areas where increased Russian-Georgian cooperation can be mutually beneficial. While the idea of Russian-Georgian cooperation may seem like a bridge too far for the region at the moment, there are several areas of mutual interest on which the two states can begin to build a productive relationship, even if it is not a cordial one.

The problem of framing the Russian Georgian relationship does not only lie with Tbilisi policymakers. Actors in Washington DC and Moscow speak of the South Caucasian country through this lens of duality as well. Recent dueling op-eds in the Washington Post (some of the only Georgia-centered reporting in American media in recent memory) spoke of Georgia’s direction as “Russia winning Georgia away from the West” and the opposite. These articles gave no deference given to the multitude of alternative routes that Georgia can take itself. The fact that large powers do not recognize Tbilisi’s agency and independence exacerbate misunderstandings about the Russian-Georgian relationship and often preclude discussion about a third way, in which large geopolitical interests are not the deciding factor. It is on this premise that we can explore the argument that Russia and Georgia do not necessarily have to like each other, but their cooperation is critical to the stability and health of the region, and perhaps in both countries best interests, regardless of larger, more long-term geopolitical goals. The strongest foundation on which to build a more cooperative relationship lies in the economic headwinds facing Russia, Georgia and the Caucasus region.

Needless Economic Spats

Even though the Soviet Union disintegrated over twenty-five years ago, the fifteen former republics are still wed to one another in real human and economic connections. Russia is still one of main trading partners of all post-Soviet states whether they are russophobic, or not. Russian industry co-opted from previous Soviet state-run firms are still spread across the region, and Russia is still the primary destination market for quintessential Georgian goods such as wine and mineral water, where people still have an embedded brand recognition. Georgian migrant laborers also view Russia as one of the primary destinations to work and set up remittance regimes with families back home. For these and many other reasons, Georgia’s economic performance is still heavily (although not entirely) dependent on the shifts and shocks in Moscow. We can see this notion in the ways that current economic woes in Russia are mirrored and manifested in Georgia as well. The most tangible aspect of this proposition is how the depreciation of the lari and the ruble have mirrored each other since 2014 (see visualization at the right). However, Georgia’s agency and interdependence can be seen in the commendable actions of its national bank to keep prices stable and growth stagnant, essentially staving off a potential recession, over this time of depreciation. Not only could the Central bank of Russia learn from the actions of Georgia’s economic managers, it would be in the best interests of the financial sectors and among consumers in both countries to recognize the interconnected dynamics of both economies and work towards a mutually favorable, and more sustainable status quo.

The last ten years of Economic cooperation between Russia and Georgia leaves much to be desired. As a result of greater political concerns, a Russian embargo on Georgian goods existed from 2006-2012, and it was extremely hurtful for Georgian agriculture. While goods flow across the border today, both sides have threatened new trade wars if relations sour more. One does not need a PhD in economics to understand that stifling natural flows of trade where there is supply and demand across borders hurt middle-class business owners and consumers alike. If Russia and Georgia attach any political spat to their economic relationship, they will be hurting their populations much more than the political agendas of their rivals.

In the world of energy and big-business as well, there is hardly any cooperative game between Russia and Georgia. Currently making headlines across the Caucasus is the aggressive negotiations between Georgia and Gazprom to monetize gas shipments rather than Georgia taking 10% of the load sent to Armenia as it has done in the past. According to work done by the Jamestown Foundation, Georgia is not necessarily opposed to monetization, but Alexi Miller, CEO of Gazprom, is attaching geopolitical goals of the Kremlin to the deal, in yet another chapter of Russia’s inability to separate energy from their politics. This calls into question a deal that has held steady since Georgian and Russian independence, through the region’s conflicts. Russia’s actions are not beneficial for any actor in the region.

From the Georgian perspective, many in Tbilisi believe that integration with the European economy is the way out of dependence on the Post-Soviet sphere. We can already see new remittance regimes set up between Georgians working in the service industry in Italy and Greece. One of the current Georgian administration’s most-touted policy victories was signing the Association Agreement (AA) which moves towards a Deep and Comprehensive Free Trade Agreement (DCFTA) with the European Union. While this is indeed a victory for Georgia’s Euro-Atlantic aspirations, there is a comprehensive misunderstanding on what it means for Georgia. Most Georgian trade and industry does not meet the standards of the European economic zone, and those that do have to compete for business with better known products. Not only is this reality present, but Georgians are stunningly misinformed about the implications of the policies of Euro-Atlantic integration. The most recent policy victory in this sphere was the liberalization of the visa process between Georgian and the EU, but it was reported that Georgian citizens did not understand the implications or mechanics of the event at all. It is reasonable that most Georgian consumers and businesses also do not understand the economic implications of rapid integration with European markets, and are likely to surprise at a more complicated trade portfolio, the costs associated with higher industry standards, and potentially higher prices in Georgia. While the goal is venerable, and a natural policy position for the country, Georgia cannot so quickly abandon its northern economic partner, lest it wants to weather a significant shock to its economy.

Potential Partners in Security

While regional economic concerns remain pointed examples of unrealized mutual benefit between Russia and Georgia, the most talked-about themes among Tbilisi and Moscow elites are conflict, security, and regional stability. Of particular salience today is the problem of Islamic militants from the North Caucasus and Georgia’s Pankisi Gorge traveling to Syria to fight with the self-styled Islamic State (IS). On January 26th Russian foreign minister, Sergei Lavrov said that IS trains its fighters in Pankisi. We also must not forget that Georgia’s inability to secure the border between Pankisi and Russia during the second Chechen War was a major factor in the deterioration of relations between the Russia and Georgia before the 2008 war. In the context of this paper’s premise, the bickering between the two capitals is somewhat puzzling. It is understandable that in the context of greater consternations that Moscow will accuse Georgia of feckless internal security, and Tbilisi would accuse Russia of unfounded propaganda or heavy-handed tactics. Both countries have caught IS recruiters on their territory and is of equal concern in each capital; however, there has been only accusations hurled each way, and no real signs of cooperation.

The international coalition against IS in Syria has coincidentally offered Caucasian security interests a modicum for cooperation, albeit one that has not yet been realized. Both Russia and Georgia have cause for concern about foreign fighters returning to their home countries to carry out attacks. Chechnya, Pankisi, and Daghestan remain a fruitful source for the ranks of radical militias in Iraq and Syria. The logical response would be for the frenemies to come together with these mutual interests to share intelligence and coordinate operations to secure the border regions. Yet, once again, the security dialogue between Georgia and Russia is trapped in dueling accusations over the breakaway republics – policy matters that will take decades to solve – rather than pragmatically addressing more immediately relevant issues.

Compartmentalization of Problems: A Diplomatic Necessary in Today’s World

Our final and most nuanced area of engagement necessary for a better Russian-Georgian frenemy relationship is the necessity of compartmentalizing key areas of its bi-lateral interactions. When observing other powerful examples of bi-lateral frenemies around the world, we see that compartmentalization is not only a powerful component of a nuanced foreign policy, but it is perhaps the norm when it comes to any complex inter-state relationship. The examples are plentiful but some of the most prominent are:

The United States and Russia, despite deep ideological and political differences in regards to spheres of influence, cooperate in space exploration and are senior parties to the peace process in the Syrian conflict. The two are perennial frenemies on the world stage, and while being diametrically opposed on the vast majority of world issues, these two states often hold the keys to larger problems or initiatives.

The United States and China are currently engaged in a tacit arms race in in South China Sea, and have vastly different approaches to international security dilemmas posed by North Korea, but the two ae patterns in world-wide economic stability. Furthermore, thanks to the high trade portfolio and China’s longtime purchasing of US debt instruments, the two economies’ stability has essentially become wed, requiring a cooperative arrangement.

A third, and perhaps best example from the contemporary world is the softening of relations between the United States and Iran. The two countries have described the other as one of their chief enemies for decades, yet they were brought to the table over mutual interests. Iran wanted sanctions lifted so it could re-enter the world market and re-gain access to its billions of dollars in assets.

In the context of the Georgian-Russian relationship, compartmentalization may seem like a bridge too far at the moment, however, it is unlikely to greatly affect either side’s political capital. On the conflicts in Abkhazia and South Ossetia, we cannot expect either side to calm their rhetoric. Additionally, we cannot expect either conflict to be resolved in the foreseeable future, perhaps even decades from now. Compartmentalization would mean that Tbilisi can still call Russia occupiers and Moscow can still blame Georgians for poor inter-ethnic relationships and oppression; however, this rhetoric would not be brought up when discussing more concrete policy engagements such as energy or regional security concerns in the North Caucasus. While this would be difficult for hardliners in Moscow and Tbilisi to accept; it would go a long way in leaving the issue primarily to the ongoing process of negotiations in Geneva, and not as an addendum on every single area of interaction between the two states. In a similar vein, Moscow must divorce itself from the idea that Georgia belongs in its presupposed sphere of influence. Georgian voters in several elections have voiced their desire for Euro-Atlantic integration – certainly inconvenient for Russia’s hubris, but something that must be accepted as the will of an independent state. As was discussed in the above section on economic cooperation, Georgia’s intricate connections to the Russian economy will take significant time to reverse, so Georgia’s optimistic rhetoric towards its Western operations is unlikely to affect the pockets of Moscow businessmen in the foreseeable future.

Compartmentalization is entirely plausible, and not that difficult to orchestrate in each country’s foreign policy apparatus. We can observe Moscow navigating frenemy relationships with many states, so it would not take much effort to apply such practices to its engagement with Georgia. However, the current state of Georgia’s policy dialogue could use a dose of maturity in this regard. Georgian politics are hamstrung by the duality of its personality-driven political machines. I have written before how the Georgian people, much like the country is thrust between large geopolitical forces beyond its control, are thrust between two feuding political factions who merely have self-interests facetiously dressed in the clothing of strategy and public policy. The UNM and GD often fight at length over aspects of the Russo-Georgian relationship and the issue is reduced to black-and white conclusions. To break this stalemate and fully reap the benefits of Georgia’s northern frenemy, its politics and policymakers need a third way.

The Final Predication ­– The Third Way in Georgian Politics

With Georgian elections approaching later this year, discussion seems to be primarily focused around whether the Georgian Dream Coalition (GD) or the United National Movement (UNM) will be controlling the country in 2017. These two sides pawn over who is the stauncher advocate of Euro-Atlantic integration and who can deliver NATO membership. However, little difference is given to Georgia’s independent voice on the world stage, and a more endogenous focus on rural poor, unemployment, and minority rights. By currently constraining its entire political agenda to broad over-arching themes, Georgia threatens the efficacy of any potential frenemy relationship, whether it be with Russia or other regional powers like Iran or Turkey. The administration can still state whatever long-term goals it wants, but it must do so with the understanding that they will not be achieved without solving the more immediate problems that Georgia faces. Furthermore, Tbilisi must recognize that the Eruo-Atlantic community to which it aspires is economically and diplomatically engaged with Russia, China, and the Middle East, and interaction with these spheres are a necessary component of integration, not a free pass to ignore them.

Recognizing the Russian frenemy and utilizing the pragmatic relationship in Georgian economic and foreign policy would include the following

Recognizing Georgia’s independent voice and relevancy on the international stage, especially in resolving regional conflict. This is predicated on Tbilisi policymakers taking more mature and nuanced positions in this regard. Georgia must also remove itself from the back-seat on major world-wide policy issues such as combating terrorism, conflict resolution, climate change, etc. and assert a uniquely Caucasian voice into these dialogues. Presently, Georgia is a second-mover, following the leader of larger and more-organized interests when its leadership could be offering new perspectives on initiatives like the Eastern partnership, the Silk Road initiative, and post-conflict measures – all of which it is experienced in broaching.

Structuring relationships and policies to incentivize trade transit across the Caucasus, cementing its role as the trade hub between East and West. This has to be done in a way that is profitable for Russian firms, rather than spacing them out of the game. This initiative is especially relevant as Iran re-enters the world market and a two-way flow of goods to and from Europe will likely flourish in the next year. If Georgia fails to assert itself in this movement of goods while simultaneously offering carrots to Russia and the movement of its goods, the region will quickly be left behind in the evolving state of worldwide trade.

Bi-Lateral cooperation with the Russian authorities on border and security matters including knowledge-sharing, and common practices when it comes to ensuring safe and secure flow of people, and preventing and rolling back the flow of radical Islamic fighters from the region to the Middle East and elsewhere. The North Caucasus and conflict in Syria are of equal concern to Tbilisi and Moscow, and without both interests cooperating on the matter, the issue will remain only partially resolved.

When thinking about inter-state relationships in general, frenemy, is perhaps a better personification than terms like ally or enemy. With today’s complexly interdependent world, it is hard to find a pair of states, save for a few outliers that do not cooperate in some areas while simultaneously bickering about other things. We have explored the productive working relationship between several international frenemies that is ongoing, as well as the multi-dimensional potential for Russia and Georgia to cooperate in a more pragmatic way. The present challenge will be for the two states to move beyond their present practice of extending policy positions to their logical extremes, and the attacks ad hominem towards their regional counterparts, of which both Russia and Georgia is guilty. In reality, the path to greater and more long-term policy goals – Russia’s maintained power and relevance, and Georgia’s gradual march Westward – should be predicated on small pragmatic victories rather than forcing a broad ideological agenda on all matters that cross the desks of their policymakers. Without this renewed approach to inter-state relations in the region, its economic stability and long-term goals of conflict reconciliation will be undoubtedly left unrealized. The worst case scenario would be for the region to experience a hitherto unforeseen conflict or crisis created by continued bellicose rhetoric and an unwillingness to cooperate. Put simply, the Caucasus deserves a better class of diplomacy, and Georgia and Russia are perfectly empowered to provide the region with just such.